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Sorbet raises $6M seed led by Viola Ventures to tackle the thorny financials of paid time off
A U.S./Israeli startup, Sorbet — which is tackling what companies do with the financial risks as employees accrue paid time off (PTO) — has raised $6 million in a seed funding round led by Viola Ventures, with participation by Global Founders Capital and Meron Capital.
The economics of paid time off is relatively hidden in the business world, but essentially, Sorbet takes on the burden of this PTO from employers and then allows employees to spend it. This gives the employers far more control over the whole process and the ability to forecast its impact on the business.
Sorbet says that in the U.S., employees use only 72% of PTO balances, even though it’s the most sought-after benefit. But this, effectively, comes out at 768 million unused days off a year, worth around $224 billion. This creates a difficult problem for CFOs and accountants because its creates balance sheet liabilities on the company’s books, says Sorbet. If the employee doesn’t use all of their PTO, the employer can end up owing them a lot of money, which creates a cash flow liability on the company’s books. So Sorbet buys out these PTO liabilities from employees, then loads the cash value of the PTO on prepaid credit cards for the employees.
Speaking to me on a call, CEO and co-founder Veetahl Eilat-Raichel, said: “We researched this whole idea of paid time off and found this huge, massive market failure and inefficiency around the way that PTO is constructed. It’s kind of one of those things where, on the face of it, there’s this boring bureaucratic payroll item that turns into a boring balance sheet item. But under it is a $224 billion problem for U.S. businesses… If you think about it, employers are borrowing money from their employees at the worst terms possible and employees aren’t benefitting either. So everyone’s hurting here.”
She said: “Sorbet assumes the liability on ourselves and so then we can allow the company to control their cash flow and decide when they want to pay us back. They gain a lot of financial value because we are able to be very, very attractive on our funding. So it saves costs, it provides them with complete control of their cash flow and it allows them to give out amazing financial benefits to employees at a time where we can all use some extra cash right now.”
The platform Sorbet has built will, it says, sync with calendars, HR and payroll systems, identify habits and then proactively suggest personalized, pre-approved 3-6 hour “Micro Breaks”, 1-4 day “Micro Vacations” and +1 week Vacations. This, says the startup, increases PTO used by as much as 15%.
Employers can constantly renegotiate the terms of the loan with Sorbet, thus matching future cash flow, insulating themselves against salary raises (wage inflation), and take advantage of other benefits.
The co-founders are Eilat-Raichel, who previously worked at L’Oréal, Lockheed Martin and a fintech entrepreneur; Eliaz Shapira, co-founder and CPO; and Rami Kasterstein, co-founder and board member.
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The second shot is kicking in
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
First and foremost, Equity was nominated for a Webby for “Best Technology Podcast”! Drop everything and go Vote for Equity! We’d appreciate it. A lot. And even if we lose, well, we’ll keep doing our thing and making each other laugh. (Note: We are in last place, which is, well, something.)
Regardless, the Equity team got together once again this week to not only go over the news of the week, but also to do a little soul searching. You see, some news broke yesterday, so we figured that we had to talk about it in our usual style. So, here’s the rundown:
- Do you want to buy TechCrunch? Apparently you can? Albeit probably along with a few billion dollars’ worth of other assets — whatever is left of Yahoo and AOL — you can now own an NFT. A non-fungible TechCrunch. What is ahead for us? We don’t know. So if you do know, tell us. Until then we’ll just yo-yo gently between panic and optimism, as per usual.
- We also dug into the latest All Raise venture capital data, and the results were abysmal.
- Next up was the news that fintech startups are setting records in 2021, raising more capital than ever before. That brought us to the latest from Brex.
- And then there was a suspicious trend when three fintech companies focused on teen banking raised in one exhale. We talk Step, Greenlight and Current.
- Natasha talked about her last Startups Weekly post, in which she unpacked The MasterClass effect’s impact on edtech.
- And to close, we discussed the latest cool-kid venture capital funds. Sure memes are cool, but did you know that they can help you raise a $10 million fund? They can!
We are back Monday morning with our weekly kick-off show. Have a great weekend!
Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!
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Geothermal technology has enormous potential to power the planet and Fervo wants to tap it
Tapping the geothermal energy stored beneath the Earth’s surface as a way to generate renewable power is one of the new visions for the future that’s captured the attention of environmentalists and oil and gas engineers alike.
That’s because it’s not only a way to generate power that doesn’t rely on greenhouse gas emitting hydrocarbons, but because it uses the same skillsets and expertise that the oil and gas industry has been honing and refining for years.
At least that’s what drew the former completion engineer (it’s not what it sounds like) Tim Latimer to the industry and to launch Fervo Energy, the Houston-based geothermal tech developer that’s picked up funding from none other than Bill Gates’ Breakthrough Energy Ventures (that fund… is so busy) and former eBay executive, Jeff Skoll’s Capricorn Investment Group.
With the new $28 million cash in hand, Fervo’s planning on ramping up its projects, which Latimer said would “bring on hundreds of megawatts of power in the next few years.”
Latimer got his first exposure to the environmental impact of power generation as a kid growing up in a small town outside of Waco, Texas near the Sandy Creek coal power plant, one of the last coal-powered plants to be built in the U.S.
Like many Texas kids, Latimer came from an oil family, and got his first jobs in the oil and gas industry before realizing that the world was going to be switching to renewables and the oil industry — along with the friends and family he knew — could be left high and dry.
It’s one reason he started working on Fervo, the entrepreneur said.
“What’s most important, from my perspective, since I started my career in the oil and gas industry, is providing folks that are part of the energy transition on the fossil fuel side to work in the clean energy future,” Latimer said. “I’ve been able to go in and hire contractors and support folks that have been out of work or challenged because of the oil price crash… And I put them to work on our rigs.”
Fervo Energy chief executive, Tim Latimer, pictured in a hardhat at one of the company’s development sites. Image Credits: Fervo Energy
When the Biden administration talks about finding jobs for employees in the hydrocarbon industry as part of the energy transition, this is exactly what they’re talking about.
And geothermal power is no longer as constrained by geography, so there are a lot of abundant resources to tap and the potential for high-paying jobs in areas that are already dependent on geological services work, Latimer said (late last year, Vox published a good overview of the history and opportunity presented by the technology).
“A large percentage of the world’s population actually lives next to good geothermal resources,” Latimer said. “[There are] 25 countries today that have geothermal installed and producing and another 25 where geothermal is going to grow.”
Geothermal power production actually has a long history in the Western U.S. and in parts of Africa where naturally occurring geysers and steam jets pouring from the earth have been obvious indicators of good geothermal resources, Latimer said.
“Fervo’s technology unlocks a new class of geothermal resource that is ready for large-scale deployment. Fervo’s geothermal systems use novel techniques, including horizontal drilling, distributed fiber optic sensing and advanced computational modelling, to deliver more repeatable and cost effective geothermal electricity,” Latimer wrote in an email. “Fervo’s technology combines with the latest advancements in Organic Rankine Cycle generation systems to deliver flexible, 24/7 carbon-free electricity.”
Initially developed with a grant from the TomKat Center at Stanford University and a fellowship funded by Activate.org at the Lawrence Berkeley National Lab’s Cyclotron Road division, Fervo has gone on to score funding from the DOE’s Geothermal Technology Office and ARPA-E to continue work with partners like Schlumberger, Rice University and the Berkeley Lab.
The combination of new and old technology is opening vast geographies to the company to potentially develop new projects.
Other companies are also looking to tap geothermal power to drive a renewable power-generation development business. Those are startups like Eavor, which has the backing of energy majors like bp Ventures, Chevron Technology Ventures, Temasek, BDC Capital, Eversource and Vickers Venture Partners; and other players including GreenFire Energy and Sage Geosystems.
Demand for geothermal projects is skyrocketing, opening up big markets for startups that can nail the cost issue for geothermal development. As Latimer noted, from 2016 to 2019 there was only one major geothermal contract, but in 2020 there were 10 new major power purchase agreements signed by the industry.
For all of these projects, cost remains a factor. Contracts that are being signed for geothermal that are in the $65 to $75 per megawatt range, according to Latimer. By comparison, solar plants are now coming in somewhere between $35 and $55 per megawatt, as The Verge reported last year.
But Latimer said the stability and predictability of geothermal power made the cost differential palatable for utilities and businesses that need the assurance of uninterruptible power supplies. As a current Houston resident, the issue is something that Latimer has an intimate experience with from this year’s winter freeze, which left him without power for five days.
Indeed, geothermal’s ability to provide always-on clean power makes it an incredibly attractive option. In a recent Department of Energy study, geothermal could meet as much as 16% of the U.S. electricity demand, and other estimates put geothermal’s contribution at nearly 20% of a fully decarbonized grid.
“We’ve long been believers in geothermal energy but have waited until we’ve seen the right technology and team to drive innovation in the sector,” said Ion Yadigaroglu of Capricorn Investment Group, in a statement. “Fervo’s technology capabilities and the partnerships they’ve created with leading research organizations make them the clear leader in the new wave of geothermal.”
Fervo Energy drilling site. Image Credits: Fervo Energy
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The health data transparency movement is birthing a new generation of startups
In the early 2000s, Jeff Bezos gave a seminal TED Talk titled “The Electricity Metaphor for the Web’s Future.” In it, he argued that the internet will enable innovation on the same scale that electricity did.
We are at a similar inflection point in healthcare, with the recent movement toward data transparency birthing a new generation of innovation and startups.
Those who follow the space closely may have noticed that there are twin struggles taking place: a push for more transparency on provider and payer data, including anonymous patient data, and another for strict privacy protection for personal patient data. What’s the main difference?
This sector is still somewhat nascent — we are in the first wave of innovation, with much more to come.
Anonymized data is much more freely available, while personal data is being locked even tighter (as it should be) due to regulations like GDPR, CCPA and their equivalents around the world.
The former trend is enabling a host of new vendors and services that will ultimately make healthcare better and more transparent for all of us.
These new companies could not have existed five years ago. The Affordable Care Act was the first step toward making anonymized data more available. It required healthcare institutions (such as hospitals and healthcare systems) to publish data on costs and outcomes. This included the release of detailed data on providers.
Later legislation required biotech and pharma companies to disclose monies paid to research partners. And every physician in the U.S. is now required to be in the National Practitioner Identifier (NPI), a comprehensive public database of providers.
All of this allowed the creation of new types of companies that give both patients and providers more control over their data. Here are some key examples of how.
Allowing patients to access all their own health data in one place
This is a key capability of patients’ newly found access to health data. Think of how often, as a patient, providers aren’t aware of treatment or a test you’ve had elsewhere. Often you end up repeating a test because a provider doesn’t have a record of a test conducted elsewhere.
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Digital comics startup Madefire is shutting down
R.I.P. Madefire, a startup that recruited high-profile artists to reinvent comics for new formats and platforms.
An announcement on the Madefire website states the company entered into “an assignment of benefit for creditors” (explained as “a state-level insolvency proceeding similar to bankruptcy”) earlier this month, which was then reported this morning in The Beat. As a result, no new books will be published, users will not be able to purchase any additional books and they’re also encouraged to download all their purchased content before the end of the month.
This news affects other apps built with Madefire’s technology. The Archie comics app has shut down as well, with the publisher writing, “We realize this comes as a surprise and we are making every effort to do right by our loyal customer base,” specifically by offering readers a free one-month subscription to Comixology Unlimited. (Amazon acquired digital comics platform Comixology in 2014, launching an Unlimited subscription service two years later.)
Madefire first launched in 2012, back when publishers were experimenting with formats like motion comics. The company described its titles as “motion books,” combining the animation and effects of motion comics with a more traditional reading experience.
“Motion comics are a passive experience, a watching experience that is tantamount to bad animation – it’s like watching a movie,” co-founder and CEO Ben Wolstenholme said at the time. “Motion Books is a reading experience, actively controlled by the reader – it’s like reading a book. Our goal is to be the best reading experience developed for the iPad.”
Perhaps the most impressive thing about the company was the artists it had enlisted before launch, including Dave Gibbons and Bill Sienkiewicz.
More recently, Madefire announced partnerships with other tech platforms, including Snapchat and troubled augmented reality company Magic Leap.
According to Crunchbase, Madefire had raised $16.4 million in funding from investors including True Ventures, Plus Capital, Kevin Spacey (yes, that Kevin Spacey) and Drake, but The Beat reports that the total was “even more than that.”
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MoviePass co-founder’s PreShow Interactive raises $3M to expand into gaming
PreShow Interactive is giving gamers a new way to earn in-game currency in exchange for watching ads — a concept that’s become familiar in mobile games but hasn’t really made much headway on PCs or consoles.
The startup is led by MoviePass’ founding CEO Stacy Spikes. When I spoke to Spikes about PreShow two years ago, he was beta testing an app that provided users with free movie tickets in exchange for watching ads. But obviously, theatrical moviegoing has taken a big hit in the past year.
Spikes told me yesterday that he’d always hoped to bring the PreShow concept to four categories — theatrical movies, gaming, subscription streaming and video on demand — but the pandemic forced the startup to shift focus more quickly than expected and explore what a gaming experience might look like.
The current plan is to launch a new PreShow Interactive app this summer, where viewers can connect their in-game accounts and identify how much virtual currency they want to earn. Then they watch a package of ads and PreShow will automatically transfer the currency to their account — in other words, it’s buying the currency for them.
Users will have to download a separate app to watch the ads and get the benefits, but Spikes said this is actually better than trying to integrate advertising or branded content into the game itself, which can be a slow process for the developer and the advertiser, while also being distracting for the players. And this means PreShow Interactive should be able to support 20,000 games at launch, across PCs, consoles and virtual reality.
Image Credits: PreShow Interactive
“We just didn’t see the purpose of spending the time on integrations when it’s not really necessary,” he added. “Our deal is only with the consumer for their time. We’re saying, ‘This is your time. It has value.’ ”
One of the key elements to Preshow’s approach is technology that can detect when the viewer is actually looking at their phone screen — the ads will stop playing if you turn away. This has been criticized as “creepy surveillance tech,” but Spikes claimed that early PreShow users have embraced it. He also argued that it’s more transparent than the data collection and targeting currently driving online advertising.
“We used to think data was the new oil, but now our feeling is that permission and engagement and attention is the new oil,” he said.
In addition to revealing its new strategy, PreShow is announcing that it has raised $3 million in seed funding led by Harlem Capital, with participation by Canaan Partners, Wavemaker Partners, Front Row Fund, ROC Fund, BK Fulton and Monroe Harris.
And to be clear, Spikes said PreShow isn’t abandoning theatrical movies. He said that the PreShow app will eventually offer both movie and gaming deals “under one roof,” but brands aren’t currently eager to advertise to moviegoers.
“We’re ready to go when the marketplace is ready to go,” he said.
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Wasabi scores $112M Series C on $700M valuation to take on cloud storage hyperscalers
Taking on Amazon S3 in the cloud storage game would seem to be a fool-hearty proposition, but Wasabi has found a way to build storage cheaply and pass the savings onto customers. Today the Boston-based startup announced a $112 million Series C investment on a $700 million valuation.
Fidelity Management & Research Company led the round with participation from previous investors. It reports that it has now raised $219 million in equity so far, along with additional debt financing, but it takes a lot of money to build a storage business.
CEO David Friend says that business is booming and he needed the money to keep it going. “The business has just been exploding. We achieved a roughly $700 million valuation on this round, so you can imagine that business is doing well. We’ve tripled in each of the last three years and we’re ahead of plan for this year,” Friend told me.
He says that demand continues to grow and he’s been getting requests internationally. That was one of the primary reasons he went looking for more capital. What’s more, data sovereignty laws require that certain types of sensitive data like financial and healthcare be stored in-country, so the company needs to build more capacity where it’s needed.
He says they have nailed down the process of building storage, typically inside co-location facilities, and during the pandemic they actually became more efficient as they hired a firm to put together the hardware for them onsite. They also put channel partners like managed service providers (MSPs) and value added resellers (VARs) to work by incentivizing them to sell Wasabi to their customers.
Wasabi storage starts at $5.99 per terabyte per month. That’s a heck of a lot cheaper than Amazon S3, which starts at 0.23 per gigabyte for the first 50 terabytes or $23.00 a terabyte, considerably more than Wasabi’s offering.
But Friend admits that Wasabi still faces headwinds as a startup. No matter how cheap it is, companies want to be sure it’s going to be there for the long haul and a round this size from an investor with the pedigree of Fidelity will give the company more credibility with large enterprise buyers without the same demands of venture capital firms.
“Fidelity to me was the ideal investor. […] They don’t want a board seat. They don’t want to come in and tell us how to run the company. They are obviously looking toward an IPO or something like that, and they are just interested in being an investor in this business because cloud storage is a virtually unlimited market opportunity,” he said.
He sees his company as the typical kind of market irritant. He says that his company has run away from competitors in his part of the market and the hyperscalers are out there not paying attention because his business remains a fraction of theirs for the time being. While an IPO is far off, he took on an institutional investor this early because he believes it’s possible eventually.
“I think this is a big enough market we’re in, and we were lucky to get in at just the right time with the right kind of technology. There’s no doubt in my mind that Wasabi could grow to be a fairly substantial public company doing cloud infrastructure. I think we have a nice niche cut out for ourselves, and I don’t see any reason why we can’t continue to grow,” he said.
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RapidDeploy raises $29M for a cloud-based dispatch platform aimed at 911 centers
The last year of pandemic living has been real-world, and sometimes harrowing, proof of how important it can be to have efficient and well-equipped emergency response services in place. They can help people remotely if need be, and when they cannot, they make sure that in-person help can be dispatched quickly in medical and other situations. Today, a company that’s building cloud-based tools to help with this process is announcing a round of funding as it continues to grow.
RapidDeploy, which provides computer-aided dispatch technology as a cloud-based service for 911 centers, has closed a round of $29 million, a Series B round of funding that will be used both to grow its business and continue expanding the SaaS tools that it provides to its customers. In the startup’s point of view, the cloud is essential to running emergency response in the most efficient manner.
“911 response would have been called out on a walkie talkie in the early days,” said Steve Raucher, the co-founder and CEO of RapidDeploy, in an interview. “Now the cloud has become the nexus of signals.”
Austin-based RapidDeploy provides data and analytics to 911 centers — the critical link between people calling for help and connecting those calls with the nearest medical, police or fire assistance — and today it has about 700 customers using its RadiusPlus, Eclipse Analytics and Nimbus CAD products.
That works out to about 10% of all 911 centers in the U.S. (7,000 in total), and covering 35% of the population (there are more centers in cities and other dense areas). Its footprint includes state coverage in Arizona, California and Kansas. It also has operations in South Africa, where it was originally founded.
The funding is coming from an interesting mix of financial and strategic investors. Led by Morpheus Ventures, the round also had participation from GreatPoint Ventures, Ericsson Ventures, Samsung Next Ventures, Tao Capital Partners and Tau Ventures, among others. It looks like the company had raised about $30 million before this latest round, according to PitchBook data. Valuation is not being disclosed.
Ericsson and Samsung, as major players in the communication industry, have a big stake in seeing through what will be the next generation of communications technology and how it is used for critical services. (And indeed, one of the big leaders in legacy and current 911 communications is Motorola, a would-be competitor of both.) AT&T is also a strategic go-to-market (distribution and sales) partner of RapidDeploy’s, and it also has integrations with Apple, Google, Microsoft and OnStar to feed data into its system.
The business of emergency response technology is a fragmented market. Raucher describes them as “mom-and-pop” businesses, with some 80% of them occupying four seats or less (a testament to the fact that a lot of the U.S. is actually significantly less urban than its outsized cities might have you think it is), and in many cases a lot of these are operating on legacy equipment.
However, in the U.S. in the last several years — buffered by innovations like the Jedi project and FirstNet, a next-generation public safety network — things have been shifting. RapidDeploy’s technology sits alongside (and in some areas competes with) companies like Carbyne and RapidSOS, which have been tapping into the innovations of cell phone technology both to help pinpoint people and improve how to help them.
RapidDeploy’s tech is based around its RadiusPlus mapping platform, which uses data from smart phones, vehicles, home security systems and other connected devices and channels it to its data stream, which can help a center determine not just location but potentially other aspects of the condition of the caller. Its Eclipse Analytics services, meanwhile, are meant to act as a kind of assistant to those centers to help triage situations and provide insights into how to respond. The Nimbus CAD then helps figure out who to call out and routing for response.
Longer term, the plan will be to leverage cloud architecture to bring in new data sources and ways of communicating between callers, centers and emergency care providers.
“It’s about being more of a triage service rather than a message switch,” Raucher said. “As we see it, the platform will evolve with customers’ needs. Tactical mapping ultimately is not big enough to cover this. We’re thinking about unified communications.” Indeed, that is the direction that many of these services seem to be going, which can only be a good thing for us consumers.
“The future of emergency services is in data, which creates a faster, more responsive 9-1-1 center,” said Mark Dyne, founding partner at Morpheus Ventures, in a statement. “We believe that the platform RapidDeploy has built provides the necessary breadth of capabilities that make the dream of Next-Gen 9-1-1 service a reality for rural and metropolitan communities across the nation and are excited to be investing in this future with Steve and his team.” Dyne has joined the RapidDeploy board with this round.
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Vivid Money raises $73 million to build a European financial super app
German startup Vivid Money has raised a new $73 million Series B funding round (€60 million) led by Greenoaks, with existing investor Ribbit Capital also participating. Following today’s funding round, Vivid Money has reached a valuation of $436 million (€360 million).
Vivid Money could be considered as a Revolut competitor designed specifically for the Eurozone. Built on top of Solarisbank for the banking infrastructure, the company lets you send, receive, spend, invest and save money in different ways.
When you create an account, you get a German IBAN that starts with DE, as well as a metal card. There are no card details on the card itself — everything is available in the app instead. Like other fintech startups, Vivid Money lets you control your card from the app — you can lock it and unlock it, add it to Google Pay and Apple Pay, etc.
After that, you can top up your account and hold dozens of different currencies. When you pay with your card abroad, the startup applies a small mark-up on the current exchange rate — you should get a better exchange rate than what you usually get with a regular bank.
In addition to this fairly standard feature set, Vivid Money offers stock trading with fractional shares. You can invest in stocks and ETFs and there’s no commission. Similarly, you can buy, hold and share cryptocurrencies from the app. The startup has partnered with CM Equity AG for those features.
The company also has a cashback program and a premium subscription for €9.90 per month. Paid users get higher limits on free cash withdrawals, the ability to create a virtual card, support for additional currencies and better cashback rewards.
Finally, users can create sub-accounts called pockets. You can move money around from one pocket to another and add other users to your pockets. Each pocket has its own IBAN, which means that you can pay for certain bills with a separate pocket. You also can associate your card with a specific pocket for upcoming purchases.
Vivid Money has managed to add a ton of features in no time. It now has a ton of money on its bank account. Now let’s see if it can attract a significant user base to compete with other, well-established European fintech players.
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Super, an Indonesian hyperlocal social commerce startup, raises $28M led by SoftBank Ventures Asia
Super’s founding team on Mount Bromo in East Java
In Indonesia, daily necessities often cost more in smaller cities and rural areas. Super co-founder and chief executive officer Steven Wongsoredjo said the price difference can vary from about 10% to 20% in Tier 2 and Tier 3 cities, to nearly 200% in eastern provinces. Super uses social commerce and a streamlined logistics chain to lower the cost of goods. The startup announced today it has raised an oversubscribed $28 million Series B led by SoftBank Ventures Asia.
Other participants included returning backers Amasia, Insignia Ventures Partners, Y-Combinator Continuity Fund and Bain Capital co-chairman Stephen Pagliuca, while partners from DST Global and TNB Aura invested for the first time in this round.
The funding brings Super’s total raised so far to more than $36 million, which the company says is the most funding an Indonesian social commerce startup has raised so far.
Super, which took part in Y Combinator’s winter 2018 batch, focuses mainly on cities or towns with a gross domestic product per capita of $5,000 USD or lower. It currently operates in 17 cities in East Java, and has a network of thousands of agents, or resellers, and hundreds of thousands of end buyers. The company will use its new funding to double its presence in the region and launch in other Indonesian provinces this year. It will also expand its product categories beyond fast-moving consumer goods (FMCG) and develop its recently-launched white label brand, SuperEats.
Wongsoredjo told TechCrunch that Super’s ultimate goal is to “build the Walmart Group of Indonesia without having a retail store and utilizing the social commerce aspect to build a sustainable model,” similar to the way Pinduoduo became one of China’s biggest e-commerce companies by focusing on smaller cities.
Prices for consumer goods are higher in small cities and rural areas because of two reasons, Wongsoredjo said. The first is that orders from smaller cities cost more to fulfill, with supply chain costs adding up, than larger orders, and the second is infrastructure that makes it harder for manufacturers and FMCG brands to truck goods into rural areas, so supply does not meet demand.
Super operates a central warehouse, along with smaller hubs closer to buyers. Most of Super’s products are supplied by regional FMCG brands, and group orders are delivered to agents, who in turn perform last-mile deliveries to their buyers. This keeps prices down by making its supply chain more efficient and enabling it to fulfill orders within 24 hours without relying on third-party logistics providers.
Other social commerce companies in Indonesia include KitaBeli, ChiliBeli and Woobiz. Wongsoredjo said Super had a headstart to serve smaller cities and rural areas because it does not focus on Jabodetabek, or the greater Jakarta region. Its headquarters and core operations teams are also all outside of major cities.
“We believe that by not having Jabodetabek’s presence in our DNA, we can build unique social commerce products with the hyperlocal touch to serve rural communities much better,” Wongsoredjo added. “We want to go after the rest of 90% of the market that is still under-penetrated.”
In statement, SoftBank Ventures Asia partner Cindy Jin said, “We have been impressed by the Super team’s deep knowledge and commitment to Indonesia’s underserved regions, and believe that a truly local team like theirs will be well equipped to navigate and build out a platform in this hyperlocal market.”
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